Which is Better – Individual Health Cover for Each Family Member or an Overall Family Floater Cover?

Answering this question and advising either one would be unfair without taking into consideration the various factors like age and health of family members, risk exposure, past medical history, financial strength and other related factors. Indeed it is one of the critical questions a customer faces while taking the decision to buy health insurance.

In India, we have two options when planning to buy health insurance. One is taking an individual health insurance plan and the other is a family floater plan. In order to arrive at the ideal solution i.e. whether to take an individual plan or family floater plan, let us go through the various pros and cons of the individual health insurance plan vis-à-vis family floater plan.

Pros of an individual health plan:

1. You avail the benefit of individual sum insured rather than floating sum insured which may get exhausted if more than one family member is hospitalized.

2. You enjoy the benefits of cumulative bonus of 10% on every claim-free year which means your sum insured is increased by 10% on every claim free year.

3. You get individual free health check up after every four claim free years.

4. You can add your parents or other family members in same policy at individual sum insured.

5. Mid-term inclusion of members is allowed under individual health plan.

6. Advisable for people who have higher exposure to health risks.

Cons of an individual health plan:

1. Individual health plans are expensive as compared to family floater plans.

Pros of family floater plan:

1. Having a floater enables the family members to access a larger shared pool as compared to individual covers. This again depends on the number of members hospitalized in a single year.

2. Cheaper than the individual health policy.

3. Advisable for younger families having less health risk exposure.

Cons of a family floater plan:

1. If there is more than one claim in a year, other family members are left with a lower sum insured or if there is a major claim, then entire sum insured may get exhausted, resulting in other members remaining uninsured.

2. You cannot cover your parents or siblings under family floater plan.

3. After attaining the age of 25, children can no longer be included in a same family floater plan and have to opt for individual health plan.

4. Not advisable for the family with higher health risk exposure.

5. If one family member claims, entire policy premium is generally loaded on next renewal.

If we take an example of Individual Health Guard and Family Floater Plan of Bajaj Allianz General Insurance, indeed cost-wise the family floater is a better option. However, coverage-wise, an individual health plan is always the best pick.

Take an example of a family where the individual (Age: 47), his spouse (44) and child (age 18) are insured for five lakh SI, the net premium for a family floater plan would amount to Rs.26663.

On the other hand, considering the same age, an individual heath guard of sum insured 5 lakh for each family member will cost Rs. 15236 for the individual, Rs. 9576 for wife and Rs. 6,156 for the child amounts to a total net premium of Rs. 30698. Just by paying Rs.4035 extra, each member of the family can enjoy individual medical insurance cover of 5 lakh, making individual health guard a better option.

After the comparative analysis of above-mentioned points, we can conclude that various factors have to be considered in order to arrive at a conclusion of taking an individual health plan or a family floater plan. Indeed both of the plans have their pros and cons. However, I’m personally in favor an individual health plan as it provides you individual insurance coverage along with different benefits to make your life easier and worry free.

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